Minister for Superannuation and Corporate Law

3 December 2007 - 8 June 2009

Interview with Derryn Hinch

3AW Drive

14 May 2009

I've got the Federal Minister for Superannuation and Corporate Governance [sic] on the line, Nick Sherry. I want to talk to him about superannuation.

Mr Sherry, good afternoon.

NICK SHERRY:

Good afternoon Derryn, good afternoon to your listeners.

DERRYN HINCH:

Now, this latest issue on super. I mean, we had back in November 12, 2007, Mr Rudd said there'll be no change to superannuation laws one jot, one tiddle(*). Well, he's already changed some in the Budget, he'll say by necessity. What's this - with this proposal to lift the super age – collection (preservation) age to 67?

NICK SHERRY:

Well, we've had the Henry tax review looking at this and other matters, including ages for the age pension, retirement incomes, including superannuation. And that is one of their recommendations that was released with the Budget papers.

But the Treasurer made it clear yesterday that no decision would be made on that matter (preservation age) until at least the end of the year. The Henry tax review has still got to complete other work on the retirement income system. So there'll be no decision made until the end of the year.

DERRYN HINCH:

But why can't you reject it out of hand because this is people's own... I use the quote, it's your money Ralph. This is people's own money.

NICK SHERRY:

Well, the review was conducted by the Henry tax review independently. And, as the Treasurer said, we'll consider that recommendation at the end of the year. We're not going to pre-empt the outcome.

I'll just give you one statistic in respect of the age pension, and I'm sure you're aware that the age pension age is being phased up to age 67...

DERRYN HINCH:

Sixty-seven by 2023.

NICK SHERRY:

Yep. Let me just give you one statistic on this because it is, I think, quite interesting. The age pension is now 100 years old; it was introduced in 1909. Then, a female life expectancy was almost 59 years, and the male was almost 55, on average. Today a person - a female, on average, lives to almost 84 years, and the male lives to around about 79.

DERRYN HINCH:

Seventy-nine, yes. We know all this, we talked about the pension at some length yesterday...

NICK SHERRY:

Okay.

DERRYN HINCH:

But I'm more worried about superannuation at the moment because you have clobbered people on super. Now, you will say it's the high income earners. But I would have thought the Government would be wanting people to rebuild their super funds, as they have taken a kicking in the last couple of years. Rebuild the super funds and encourage people to be self-funded retirees. You'll have less pensioners.

NICK SHERRY:

Well, just on that point of the change to the contributions caps. Now, at the moment a person over the age of 50 can put in up to $100,000. And if you're aged less than 50 you can put in up to $50,000.

Now, they are being lowered, those caps.

DERRYN HINCH:

So that's one broken promise.

NICK SHERRY:

Those caps...

DERRYN HINCH:

Isn't it?

NICK SHERRY:

Well, no, I don't accept that.

DERRYN HINCH:

Well, Mr Rudd said there will be no change to the superannuation laws one jot, one tiddle.

NICK SHERRY: Well, I'd like to see the context he made that comment in. I do recall in the election campaign us responding to what was an incorrect claim that we were going to increase the nine per cent compulsory superannuation guarantee. And we said, absolutely not...

DERRYN HINCH:

And that hasn't happened and it won't happen.

NICK SHERRY:

That's right. And that's been our position. And also there was some allegation we were going to increase the tax free superannuation, or remove (tax free superannuation) at age 60, and we haven't done that.

DERRYN HINCH:

Well, but let's talk six months from now because you'll be looking at the Henry report. And I would - Hinch's hunch, I'll bet money you'll fiddle with super come the end of the year.

NICK SHERRY:

Well, you're specifically talking about the (preservation) age...

DERRYN HINCH:

[Indistinct] yes.

NICK SHERRY: Well, as far as the age issue goes, I said to you, Derryn, the Treasurer announced yesterday there will be no consideration of that issue until the other matters are dealt with...

DERRYN HINCH:

And I will bet you - Hinch's hunch, you will increase it to age 67 to bring it in line with the old age pension.

NICK SHERRY:

Well, I'd make one point on this. The superannuation access age was age 55, and it's being phased up to age 60. For people who were born after 1965, it's 60 years of age. And that phasing process has occurred before. So I'll make that point.

But, look, you can interview me at the end of the year and we'll see whether you're right or wrong, and we'll obviously have a discussion about it.